NOTES: Nearline HDDs are included in the enterprise segment. Adjustments to shipments and market shares in this document may be made in the final Quarterly Update.

Seagate
For the second straight quarter, Seagate continued its tactic to shift its business towards the more lucrative enterprise segment, giving up share in the lower margin, lower ASP client HDD space. As a result, Seagate managed to raise ASPs by $1 in CQ2 '13 to $64. The company shipped 53.89 million HDDs in total - a 3% sequential drop - while posting good gains in the enterprise segment, notably from strong demand in the nearline, or business critical sub-category. From the prior quarter Seagate's nearline shipments jumped over 15% to 4.50 million units. Traditional enterprise, or mission critical as designated by the company also increased 2% from CQ1 '13. Seagate's gross margins lifted 50 basis points from the prior quarter, reaching 27.4%, despite the share and revenue decline.

Toshiba
After gaining measurable share in CQ1 '13, Toshiba's unit shipment slipped by 2.2%, nearly matching the overall TAM decline and thus maintaining its market share that it gained in the prior quarter. In CQ2 '13, Toshiba's units totaled 19.61 million. While the company gave up sequential units in all segments, it managed to maintain minimal declines in both its desktop and mobile categories. A 0.20 million sequential decline in enterprise represented a fall of nearly 16% from the prior quarter, but fluctuations in Toshiba's enterprise business has been witnessed over many quarters and may be due to the lumpy demand nature of its major enterprise customers.

Western Digital
As the largest HDD supplier in the industry running two separate subsidiaries - WD and HGST - WDC gained a small amount of share in CQ2 '13 as its sequential unit decline was limited to only 1% with 59.90 million HDDs shipped. Similar to its closest rival, WDC benefitted from strong nearline demand growth with units increasing more than 13% sequentially to 4.66 million units. ASP's dipped by $1 from CQ1 '13 to $60 in CQ2 '13; however, cost controls enabled the company to keep gross margins flat from the prior quarter at 28.2%.

HDD Supplier, CQ2 '13, Units in Million

Supplier

Units

Change Q1/Q2

Q2 Market share

Seagate

53.89

-3.2%

40.4%

Toshiba

19.61

-2.2%

14.7%

Western Digital

59.90

-0.4%

44.9%

Total

133.40

-1.9%

100.0%

Mobile HDDs
Mobile HDD shipments dipped only slightly from the prior quarter, declining 0.4% to 61.93 million in CQ2 '13. For the quarter, the small decline in sequential shipments was indicative of preparations for the release of new Intel Haswell-based notebook PCs and some early builds for CQ3 back-to-school demand. Notebook PC demand, however, remains very muted and even with second half seasonal increases, the 2013 PC market is projected to decline from the prior year by more than 8%. Average capacity remained nearly flat from the prior quarter at 610GB, resulting in an exabyte decline that matches the modest unit drop.

Desktop HDDs
Desktop HDDs were the weakest segment in CQ2 '13, dropping 8.3% from the prior quarter. With seasonal weakness in both desktop PCs and external HDDs, average capacities declined by 15GB to 928GB and exabytes fell by 9.7% to 36.91EB. Even though PC demand is suppressed in 2013, corporate budget clearing activities toward the end of the year along with holiday sales of external HDDs should boost desktop HDD shipments during 2H '13.

Enterprise HDDs
The enterprise HDD demand in CQ2 was up sharply due to strong demand for nearline HDDs. Hyperscale companies expanding and deploying new datacenters have fueled demand for capacity optimized HDDs and for the quarter, nearline HDD units jumped over 1 million units, or over 12%, from CQ1 to end at 9.38 million. Traditional, or performance-optimized, enterprise HDDs also moved slightly higher sequentially, rising from 7.68 million in CQ1 '13 to 7.80 million in CQ2 '13. Although nearline demand fluctuates depending on the timing of datacenter build-outs, the increasing number of large hyperscale players has apparently smoothed out the demand spikes, driving nearly consistent quarter-to-quarter growth since late last year. Capacity shipped also grew smartly with the unit increase, jumping nearly 14% to 23.55EB. NOTE: For CQ2 '13, we made a one-time adjustment for enterprise HDD ASPs, which affected revenue calculations; therefore, CQ1 '13 to CQ2 '13 percent declines in revenue are larger than actual. Going forward, enterprise revenue and quarter-to-quarter percent declines will reflect actual industry conditions.

CE HDDs
The vast majority of CE HDDs are consumed by xVRs or set-top box recorders - a market that is usually not affected as strongly by seasonal buying the seasonal buying patterns that drive client applications. Total CE shipments ticked up a modest 0.8% to 14.52 million units, with increases in both 3.5" and 2.5" form factors. Late in CQ2 '13, both Microsoft and Sony announced new gaming consoles that will ship with 500GB 2.5" CE HDDs. Even though the gaming market has been transformed by mobile devices in recent years, the release of new console platforms this year will drive measur able increases in the second of the year for 2.5" CE HDD units. Average capacity increases for xVRs drove an 8% increase in capacity shipped, rising to 10.36EB.

5 399

Production Discipline Cuts HDD Shipments to 133 Million in 2Q13 – Trendfocus

WD flat, Seagate and Toshiba down marginally
By Jean-Jacques Maleval on 2013.07.05

Here the figures are estimates and are intended for preliminary guidance only. Final shipments numbers and ASPs will be published in Trendfocus' CQ1 '13 Quarterly.

By Trendfocus, Inc.
3.5" Desktop/CE HDDs49M units, down approximately 3M from CQ1 '13. Desktop/CE HDD showed the greatest downward movement of any segment in CQ2, mostly on much weaker than expected desktop PC shipments. 3.5" CE HDDs for DVR continued to hold on to fairly steady demand, resulting in a total segment decline. Consumer desktop units, especially new all-in-one (AIO) PCs should see a slight seasonal boost in 2H '13, but commercial demand for desktop PCs will likely remain weak through much of the remainder of the year, except for the possibility of some end-of-year (budget flushing) purchasing activity.
2.5" Mobile/CE HDDs68M units, flat from CQ1. Despite a slight improvement in ODM notebook system builds in May, demand for PCs remains very weak and PC OEMs are looking toward deploying new Windows 8 touch-based models across all price bands in 2H '13 in hopes of stabilizing, what has been to date, a continued softening of the market on a year-over-year basis. However, preparation for CQ3 back-to-school demand plus the new Sony and Microsoft gaming console announcements (containing 500GB 2.5" HDDs) provided enough demand to keep sequential shipments nearly flat to the prior quarter.
3.5"/2.5" Enterprise HDDsNearly 17M units, up 5% sequentially. Traditional performance enterprise shipments held fairly steady from the prior quarter while nearline HDDs for capacity enterprise storage and hyperscale applications continued demand momentum. Nearline HDD shipments appear to have broken through the 9 million unit mark - this time on real demand and not artificially inflated based on post-Thailand flood volume purchase agreements.